Investors grab office park for $136M
Palo Alto remains popular thanks to tech reputation
PALO ALTO >> Extending Palo Alto’s reign as a hotbed of realty purchases, investors have plunked down a big chunk of cash for the city’s Embarcadero Place office complex.
ARE San Francisco No. 69, an affiliate of Alexandria Real Estate Equities, paid $136 million this week for the 197,000-square-foot office complex on Geng Road near Embarcadero Road in Palo Alto.
“It’s kind of a land grab to acquire what product is available, especially in desirable areas like Palo Alto,” said Chad Leiker, a first vice president with Kidder Mathews, a commercial realty firm.
The sale, by Hudson Pacific Properties, marks the second major purchase, by price, of an office property in Palo Alto this month. On Jan. 18, an affiliate of American Realty Advisors paid $138 million for a new 64,000-square-foot office building occupied by a tech unit of Visa in the city’s trendy
California Avenue business district.
Palo Alto is popular, industry experts say, because of the culture of tech startups that have been born there, the influence of Stanford University and the proximity to a bustling downtown.
That’s led to an enduring interest among property investors, both commercial and residential, in Palo Alto.
“Palo Alto was, is now and always will be Palo Alto,” said Rick Knauf, executive managing director with Colliers International, a commercial realty brokerage. “There has never been a doubt that investors are interested in Palo Alto.”
The four buildings in the most recent deal are all roughly 49,000 square feet in size, according to Newmark Cornish & Carey, a commercial realty brokerage that has been marketing the buildings to prospective tenants.
“Palo Alto is still ground zero as a desired location,” Leiker said. “It’s a top market, whether in Silicon Valley or the Bay Area in general.”